Berkley Estate Tax Bill Would Add Billions to Deficit While Benefiting Only Wealthiest 1 in 500 Estates — Center on Budget and Policy Priorities

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By Chuck Marr and Gillian Brunet

A new estate tax bill introduced by Representative Shelley Berkley (D-NV) and others would cost $119 billion more over the first decade (2012-2021) than extending the tax under its current rules as the President has proposed, yet would benefit only the nation’s wealthiest 0.2 percent of estates since they are the only ones subject to the tax under the current rules. In subsequent decades, the Berkley proposal (H.R. 3905) would be even more expensive compared to extending the current estate tax rules; the proposal keeps its cost down in the initial years by phasing in its estate tax cuts over a decade, with its full costs not showing up until after 2019.

Ultimately, the Berkley proposal would increase deficits and debt by nearly as much as a proposal by Senators Blanche Lincoln (D-AR) and Jon Kyl (R-AZ), which it mirrors once it is phased in fully.[1] Like the Lincoln-Kyl proposal, the Berkley bill would eventually allow wealthy individuals to pass on $5 million per person — $10 million per couple — to their heirs tax-free and would cut the tax rate that applies to the taxable portion of estates from 45 percent to 35 percent.
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H.R. 3905: Estate Tax Relief Act of 2009 (GovTrack.us)

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To amend the Internal Revenue Code of 1986 to repeal the 1-year termination of the estate tax, to increase the estate and gift tax unified credit, and to coordinate a reduction in the maximum rate of tax with a phaseout of the deduction for State death taxes.

Sponsor: Rep. Shelley Berkley [D-NV1]
Cosponsors: Kevin Brady [R-TX8]Artur Davis [D-AL7]Devin Nunes [R-CA2

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Status:
Introduced Oct 22, 2009
Referred to Committee on Ways & Means

Updated Information